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Press release from Marketwire

DirectCash Payments Inc. Announces Results of Operations for the Three Months Ended March 31, 2011

Wednesday, May 11, 2011

DirectCash Payments Inc. Announces Results of Operations for the Three Months Ended March 31, 201107:30 EDT Wednesday, May 11, 2011CALGARY, ALBERTA--(Marketwire - May 11, 2011) - DirectCash Payments Inc. (TSX:DCI) ("DirectCash" or the "Corporation") today announced consolidated financial results for the three months ended March 31, 2011. DCPayments's consolidated financial statements for the three months ended March 31, 2011 and Management's Discussion & Analysis, as well as additional information about the Corporation are available on SEDAR (www.sedar.com).Q1 2011 Financial and Operational Highlights compared Q1 2010:-- Increased EBITDA 15% to $9.2 million -- Increased Gross Profits 19% to $14.1 million -- Funds from operations payout ratio has been reduced to 52% from 66% -- Increased ATM network bringing the total number of active ATMs to 7,671 -- Commenced operations in the prepaid card business in Australia Management's Commentary"The first quarter of 2011 has generated strong financial results for DirectCash with significant improvements in EBITDA and Distributable Cash Flow over the same period last year. We have continued to demonstrate our ability to generate positive returns for our Shareholders, and we are very pleased with our results and our successful conversion to a dividend paying corporation" said Jeffrey Smith, DirectCash's President and Chief Executive Officer. The primary drivers for the improvements over the prior year period are the contributions from the acquisition of Cashline, the higher year over year activity in prepaid cash card transactions and the addition of bank accounts offered to prepaid customers. Consistent performance and strong growth has been seen throughout all of DirectCash's lines of business.DirectCash will continue to pursue growth through additional accretive acquisitions as opportunities arise. DirectCash's stable, contracted revenue stream, dominant market positions, and continued growth will continue to provide consistent cash dividends to DirectCash's Shareholders. DirectCash continues to consider new geographic markets and focus on its Canadian and Mexican operations, to add to recurring services revenue growth and gross profit margins.Conversion CompletionThe Fund successfully completed a previously announced plan of arrangement under the Business Corporations Act (Alberta) pursuant to which the Fund was converted from an income trust to a dividend paying corporation operating under the name "DirectCash Payments Inc.". Pursuant to the Arrangement, DCPayments acquired and assumed, directly or indirectly, 100% of the assets and liabilities previously held in the Fund and the DirectCash Commercial Trust ("DCCT"). The Arrangement was competed in a number of sequential steps timed from 4:58 p.m. on December 31, 2010 to 12:01 a.m. on January 1, 2011 and involved DCPayments, the Fund, the Fund's subsidiaries and the securityholders of the Fund. The Fund was dissolved pursuant to the Arrangement effective January 1, 2011.Beginning after January 1, 2011 (starting with the January 31, 2011 record date), Shareholders of DCPayments have received monthly payments in the form of dividends, with the initial monthly dividend set at $0.115 per Common Share.International Financial Reporting StandardsResults are reported in Canadian dollars and have been prepared in accordance with International Financial Reporting Standards ("IFRS") for the period ended March 31, 2011.For reconciliations of equity and total comprehensive income for comparative periods and of equity at the date of transition reported under previous Canadian GAAP to those reported for those periods and at the date of transition under IFRS see the notes to the Q1 2011 Financial Statements available for download from www.SEDAR.com.Results of Operations for the three months ended March 31, 2011:Operational Highlights ---------------------------------------------------------------------------- Three months ended March 31 2011 2010----------------------------------------------------------------------------Number of machines ATM terminals - active(1) 7,671 6,339 Debit terminals - active(1) 3,236 3,110Number of transactions ATM transactions 8,214,126 7,285,040 Debit terminal transactions 2,607,737 2,570,473 Prepaid cash card activations 814,830 832,141 Prepaid cash card transactions 2,121,439 2,030,113----------------------------------------------------------------------------(1) DirectCash has included statistics only for sites that recorded a transaction in the last calendar month of the period indicated.Compared to the prior year period, the number of active ATMs increased by 1,332. The net increase is primarily a result of the acquisition of 830 ATM sites and related contracts of Cashline Inc. on July 31, 2010. Additional growth can be attributed to acquisitions made throughout 2010, as well as additional ATMs placed in Mexico.ATM transactions increased during the three months ended March 31, 2011 compared to the prior year due to the increased number of ATMs deployed. Based on statistics provided by Interac, ATM transactions in the Canadian industry as a whole continued their historical decline on a per ATM basis (this results from a combination of a decrease in total transactions and an increase in the number of ATMs that the total transactions are spread among). On an industry wide basis, as more ATMs have been added to the Canadian marketplace there has been no corresponding increase in overall industry transactions. DirectCash's prepaid products business and entrance into new geographic markets are offsetting this effect on DirectCash's business.DirectCash's goal in the ATM business is to continue to maintain existing customer relationships, add sites and grow aggregate transactions through accretive acquisitions and to maximize site profitability through cost and quality control. In addition, DirectCash is considering new geographic markets, to add to recurring services revenue growth and gross profit margins.On a year over year basis, the number of active debit terminals has increased by 126 due to an acquisition made during the third quarter of 2010. The increase in transactions for the three months ended March 31, 2011 is reflective of both the increased number of devices deployed and higher transaction volumes on newly deployed terminals. DirectCash continues to pursue organic growth in this business segment and to grow market share by providing retailers with unique products and services to enhance the business viability of the debit terminal for the retailer.Prepaid card activations declined 2% compared to the prior year period. Notwithstanding the slight decline in activations, revenue and gross profit increased significantly in this line of business due to the addition of new products, including the new bank account product offered through DirectCash's strategic alliance with DC Bank and one of DirectCash's significant customers. The MasterCard prepaid card program continues to find traction and displace some debit card activations.The increase in prepaid card transactions for the three months ended March 31, 2011 is due to growth within existing customer relationships, as prepaid products continue to gain customer acceptance and confidence. Prepaid credit card transactions experienced significant growth during the three months ended March 31, 2011 compared to the prior year. Activation and transaction volume figures include both prepaid debit and prepaid credit cards.The following table presents a summary of the DCPayments' selected consolidated financial information for the three months ended March 31, 2011 and 2010:Financial Highlights ---------------------------------------------------------------------------- Three Months Ended (thousands) March 31 2011 2010 ----------------------------------------------------------------------------Revenues Recurring services revenue $ 24,250 $ 20,924 Products revenue 5,534 5,190 Interest income 75 2 ----------------------------------------------------------------------------Total revenue $ 29,859 $ 26,116 ----------------------------------------------------------------------------Gross Profit Recurring services and interest $ 13,347 $ 11,289 Gross profit margin 54.9% 53.9%Products 741 516 Gross profit margin 13.4% 9.9%----------------------------------------------------------------------------Total gross profit $ 14,088 $ 11,805 Total gross profit margin 47.2% 45.2%----------------------------------------------------------------------------Operating expenses & Net finance costs: Personnel expenses 2,682 1,995 Long-term incentive plan 432 388 Other expenses 1,787 1,425 Purchase gain on acquisition - (4,238) Depreciation of equipment 1,144 766 Amortization of intangible assets 2,876 2,058 Finance costs 389 268 Distributions on Exchangeable partnership units - 1,562 Net change in fair value of exchangeable partnership units - (3,395) Unrealized loss on foreign exchange - (18)---------------------------------------------------------------------------- 9,310 811 ----------------------------------------------------------------------------Net income before income taxes $ 4,778 $ 10,994 ---------------------------------------------------------------------------- Income taxes - Current 93 53 Deferred income tax 1,184 (446)----------------------------------------------------------------------------Net income $ 3,501 $ 11,387 Net income per share, basic 0.25 1.47 Net income per share, diluted 0.25 1.43 ----------------------------------------------------------------------------Add back: Finance costs 389 268 Distributions on Exchangeable partnership units - 1,562 Net change in fair value of exchangeable partnership units - (3,395) Purchase gain on acquisition - (4,238) Depreciation of equipment 1,144 766 Amortization of intangible assets 2,876 2,058 Income taxes - Current 93 53 Deferred income tax 1,184 (446)----------------------------------------------------------------------------EBITDA $ 9,187 $ 8,015 EBITDA margin 30.8% 30.7%----------------------------------------------------------------------------Total assets $ 159,124 $ 129,033 Total debt 46,245 42,562 Total debt net of cash 2,971 16,211 ----------------------------------------------------------------------------RevenueTotal revenue has increased by 14% for the three months ended March 31,2011, as compared to the prior year period. Revenue by line of business,which includes both recurring services and products revenue, is as follows:Revenue by Line of Business---------------------------------------------------------------------------- Three months ended (thousands) March 31 2011 2010----------------------------------------------------------------------------ATM Business $ 13,081 $ 9,802Prepaid products business 16,274 15,836Debit terminal business 504 478----------------------------------------------------------------------------Total Revenue $ 29,859 $ 26,116----------------------------------------------------------------------------Revenue by type ----------------------------------------------------------------------------Recurring services $ 24,250 $ 20,924Products 5,534 5,190Interest 75 2----------------------------------------------------------------------------Total Revenue $ 29,859 $ 26,116----------------------------------------------------------------------------Revenue - Recurring ServicesRecurring services revenue relates to revenue earned from transaction processing activities, including DirectCash's ATM, debit terminal and prepaid product lines of business.The increase of 16% over 2010 in recurring services revenue is primarily attributable to the ATM line of business. The increase in ATM recurring services revenue can be attributed to the revenues generated from the additional 830 ATM sites and related contracts acquired from Cashline Inc. on July 31, 2010, as well as additional acquisitions made throughout 2010.The increase in prepaid products recurring services revenue comes primarily from the MasterCard prepaid card product as customers show greater acceptance and use of this product. Additional revenue was also earned through fees associated with bank accounts and associated products offered to DirectCash's prepaid customers through DirectCash's strategic alliance with DirectCash Bank and one of DirectCash's significant customers. DirectCash's prepaid card merchant customers are also continuing to expand their customer base through the growth of their retail locations.On a year over year basis, revenue in the ATM business has increased by 33%. ATM revenues include the revenue from the sale of ATM machines and parts, processing ATM transactions as well as miscellaneous revenues and interest received.The 5% increase in debit terminal revenue for the three months ended March 31, 2011 is a direct result of the increased number of devices deployed, improved transaction volumes and higher per transaction revenues.There is historic seasonality in processing transaction volumes, with the highest ATM transaction activity in Canada typically occurring in the second and third quarters of the year. The first and fourth quarters are traditionally DirectCash's weakest quarters in terms of processing transactions and gross profitability. In Mexico, seasonality in the ATM business is the opposite of what is seen from DirectCash's Canadian operations. DirectCash has eliminated the impact of seasonal fluctuations in cash flows to Shareholders by equalizing monthly cash dividends. This seasonality is considered when determining levels of available cash at the end of each reporting period.Revenue - ProductsProduct revenue includes sales of ATM machines, debit terminals and related parts, as well as prepaid products, consisting of (a) prepaid cash cards (debit and credit) and (b)prepaid telephone cards (both physical ("hard cards") and electronic ("virtual vouchers")).For the three months ended March 31, 2011 revenue from product sales increased by 7% compared to the prior year period. The increase can be explained primarily by an increase in the sale of prepaid cash cards, partially offset by a slight decline in the sale of telephone cards. The increase in the sale of prepaid cash cards is a result of timing of sales, as customers order intermittently in large quantities to benefit from volume discounts.ATM and debit terminal sales were up due to existing customers purchase of new terminals that meet industry standards.Interest IncomeDuring the three months ended March 31, 2011 interest income increased significantly compared to the prior year period primarily as a result of the renegotiation of DirectCash's agreement with its bank in Mexico regarding funds held in relation to cash requirements for Mexican operations.Gross ProfitsIn total, gross profits have increased by 19% for the three months ended March 31, 2011, as compared to the same period last year. Gross profit by line of business, which includes both recurring services and products revenue, is as follows:Gross profit by Line of Business ---------------------------------------------------------------------------- Three months ended (thousands) March 31 2011 2010----------------------------------------------------------------------------ATM Business $ 7,189 $ 5,602 gross profit margin 55.0% 57.2%Prepaid products business 6,502 5,845 gross profit margin 40.0% 36.9%Debit terminal business 397 358 gross profit margin 78.8% 74.9%----------------------------------------------------------------------------Total Gross Profit $ 14,088 $ 11,805 gross profit margin 47.2% 45.2%----------------------------------------------------------------------------Gross profit by type ----------------------------------------------------------------------------Recurring services and interest $ 13,347 $ 11,289 gross profit margin 54.9% 53.9%Products 741 516 gross profit margin 13.4% 9.9%----------------------------------------------------------------------------Total Gross Profit $ 14,088 $ 11,805 gross profit margin 47.2% 45.2%----------------------------------------------------------------------------Gross Profitability - Recurring ServicesTotal gross profits from recurring services revenue and interest income forthe three months ended March 31, 2011 increased by 18% over the prior year.The increase in gross profits for recurring services can be attributed tothe following factors:a. fees associated with bank accounts and related products offered by DirectCash Bank to prepaid customers; b. higher activity in prepaid credit card transactions; c. higher margin contributions from the debit terminal business, and; d. the impact of the ATM acquisitions made during 2010. Gross profit margins on a year over year comparison are slightly higher.The debit terminal recurring services gross margins increased as a result of more active machines and higher revenue per transaction.The introduction of bank accounts and associated products, as well as the increase in transaction levels and improved performance from the prepaid credit card product in the prepaid products line of business resulted in the increase in contribution from the recurring services business segment.Gross Profitability - ProductsGross profit from the sale of products for the three months ended March 31, 2011 increased by 44% from 2010 levels. The increase can be explained primarily by a combination of increased sales and higher margin contributions on the sale of ATMs and ATM parts. The sale of ATMs has increased, as existing customers purchase new equipment that meets industry standards.DirectCash has a strategic goal of keeping ATM and debit terminal purchase prices as low as possible for the DirectCash customer in order to maximize the number of machines that can be placed. DirectCash also introduced financing options that enables customers to pay for machines and security upgrades over a period of time. DirectCash believes that this strategy will result in additional long-term revenue generating services contracts.Selling, General & Administrative Expenses ("SG&A")For the three months ended March 31, 2011 SG&A expenses increased by 34% from the prior year.The increase is the result of higher salaries and benefits incurred from the addition of some key staff members brought on to assist in DirectCash's growth, as well as additional fees associated with compliance related to Anti-Money Laundering and to the bank account product offered through DirectCash's strategic alliance with DirectCash Bank.As a percentage of gross profits, SG&A was 32% during the three months ended March 31, 2011 compared to 29% for the same period last year.Long-term incentive plan ("LTIP")Details of the Long-term incentive plan can be found in the notes to the financial statements.The base threshold is $1.99 per Common Share as defined under the "LTIP Agreement", effective from January 1, 2011.Interest ExpenseFor the quarter ended March 31, 2011 interest expense increased by 45% over the prior year period. The increase is primarily due to increased ATM vault cash requirements.All DirectCash debt is currently on floating interest rates. A one percent change in interest rates would result in an approximate $124 thousand change in interest expense for the quarter ended March 31, 2011.Net IncomeNet income for the three months ended March 31, 2011 decreased by 69% compared to the prior year period.The decrease in net income can be attributed to the following factors:a. $1.2 million in deferred income tax during the first quarter of 2011; b. $4.2 million purchase gain on acquisition incurred during the first quarter of 2010, and; c. additional effects of the transition to IFRS, including distributions on and the net change in fair value of exchangeable partnership units. The disparity between net income and cash dividends is primarily due to amortization of intangible assets related to ATM, debit terminal and prepaid product contracts. Typically, these contracts include automatic renewals for a further 5-7 year period, and a right of first refusal to match a competitor's bona fide offer on renewal unless the customer terminates the contract within a specified time period. Thus, while a contract acquired by DirectCash may have a fixed initial term (which is the time period over which amortization of this intangible asset occurs) DirectCash's experience is that DirectCash is usually able to keep the applicable ATMs attached to the DirectCash network with no or little capital expenditure. Also, any ATM added by organic growth (i.e. through the DirectCash sales force) has a much lower capital cost than ATM locations added through acquisition.EBITDAFor the quarter ended March 31, 2011, EBITDA increased by 15% over prior year levels, which is lower than the 19% increase in gross profits. This reflects the higher gross profit contributions offset in part by the higher SG&A and LTIP accrual costs. As a percentage of revenue, EBITDA was 31% during the three months ended March 31, 2011 as compared to 31% during Q1 2010.For comparative purposes, the $4.2 million purchase gain was eliminated from DCPayments' EBITDA calculations due to its non-recurring nature.Capital ExpendituresDirectCash incurred the following expenditures of a capital nature:Capital Expenditures Three months ended March 31 ---------------------------------------------------------------------------- 2010 2009----------------------------------------------------------------------------Per consolidated financial statements: Equipment $ 1,346 $ 994Intangible assets 33 1,704Acquisitions - 319---------------------------------------------------------------------------- $ 1,379 $ 3,017----------------------------------------------------------------------------Split between growth and maintenance: Growth capital $ 669 $ 2,460Maintenance capital 710 557---------------------------------------------------------------------------- $ 1,379 $ 3,017----------------------------------------------------------------------------Growth capital expenditures relate to acquisitions and other expenditures that increase DirectCash's productive capacity, while maintenance capital expenditures maintain productive capacity at existing levels.Productive capital maintenance expenditures for the three months ended March 31, 2011 are higher than 2010 due to increased security infrastructure and ATM hardware upgrade expenditure requirements. Growth capital expenditures can vary widely between reporting periods due to the intermittent nature and varying size of acquisitions.Liquidity and Capital ResourcesDirectCash believes that the funds generated from operations will be sufficient to allow DirectCash to meet ongoing requirements for working capital, maintenance capital expenditures including investments in technology capital, interest expense, and cash dividends to Shareholders.DirectCash's actual cash generated from operations will be dependent upon future financial performance, which in turn will be subject to financial, tax, business and other factors.As of March 31, 2011, DirectCash utilized approximately $46.2 million of a total available credit facilities of $80.0 million. A summary of DirectCash's available credit at March 31, 2011 is as follows:Credit facilities ----------------------------------------------------------------------------(thousands) Utilized Limit Available----------------------------------------------------------------------------Revolving credit facility $ 14,872 $ 45,000 $ 30,128Acquisition credit facility 31,373 35,000 3,627---------------------------------------------------------------------------- $ 46,245 $ 80,000 $ 33,755----------------------------------------------------------------------------The revolving credit facility is used for ATM cash loading, working capital requirements and commercial letters of credit. In addition, DirectCash has an outstanding letter of credit in favour of MasterCard International of US$ 2.5 million (CDN$ 2.5 million) relating to DCPayments' prepaid MasterCard program. This credit facility is demand in nature and bears interest at the Bank's prime lending rate plus 0.375%.The acquisition credit facility is demand in nature and is utilized for the acquisition of additional ATM and Debit Terminal network and Prepaid Product assets, and general corporate acquisitions in complimentary business lines. The facility bears interest at the Bank's prime lending rate plus 0.375% or at banker's acceptance rates plus 1.875% per annum.Notwithstanding the demand nature of the facilities, there are no scheduled principal repayments.Subsequent to the quarter, DirectCash increased its credit facilities from $80 million to $100 million to accommodate increased vault cash and operating requirements.DirectCash is subject to the following primary lending covenants:Lending covenants ---------------------------------------------------------------------------- Mar-31 Covenant Limit----------------------------------------------------------------------------Funded Debt to Recurring Quarterly Revenue 2.1:1 lesser than 10:1Fixed Charge Cover Ratio 23.6:1 greater than 4:1Senior Debt to EBITDA 1.2:1 greater than 2:1----------------------------------------------------------------------------DirectCash operated well within its loan covenant limits and anticipates continuing to do so in the future. Breach of DirectCash's bank loan covenants could result in the triggering of remedies by DirectCash's lenders, which could negatively impact distribution payments.Additional InformationAdditional information about DirectCash, including DirectCash's Annual Information Form and other public filings is available on SEDAR (www.sedar.com) and on DirectCash's website (www.directcash.net).Non-IFRS MeasuresThere are a number of financial calculations that are not defined performance measurements under IFRS but which DCPayments believes are useful and accepted performance measurements utilized by the investing public in assessing the overall financial performance of corporations.Earnings before interest, taxes, depreciation and amortization ("EBITDA")EBITDA represents gross profits less selling, general and administrative expenses ("SG&A") and long-term incentive plan expenses, and is not a defined performance measure under IFRS. DCPayments believes that EBITDA is a useful supplementary disclosure commonly used by the investing community to assess and compare cash flows between entities. EBITDA specifically excludes depreciation, amortization, income taxes and interest expense. DCPayments EBITDA may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to EBITDA as reported by such issuers. The most directly comparable IFRS measure is Net Income. A reconciliation between EBITDA and Net Income is disclosed in the "Financial Highlights" schedule later on.Funds from operations and funds from operations per shareFunds from operations and funds from operations per unit are non-IFRS measures used by DCPayments as an indicator of financial performance. Readers are cautioned that funds from operaitons is not a defined performance measure under IFRS and that funds from operations cannot be assured to continue at equivalent levels in the future. DCPayments calculates funds from operations as equal to the net cash from operating activities before changes in non-cash working capital, after provision for productive capital maintenance capital expenditures (see discussion below). DCPayments' funds from operations and funds from operations per share may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to funds from operations and funds from operations per common share as reported by such issuers.Up until January 1, 2011, Unitholders of the Fund received cash distributions sourced from distributions made by DirectCash LP indirectly to the Fund. The Fund's policy was to distribute, to the maximum extent possible, the cash earned from operations to Fund Unitholders, less amounts estimated to be required for expenses, productive capital maintenance, cash redemptions or repurchases of Units, any current tax liability, or other obligations, debt repayments and any reasonable reserves established. The Fund made monthly cash distributions to Unitholders on the last business day of each month to Unitholders of record on the last business day of the preceding month.From August 2006 to January 1, 2011, monthly distributions were paid at $0.115 per Unit per month ($1.38 per Unit annualized) and special distributions of $0.120 per Unit and $0.100 per Unit were paid December 31, 2009 and June 30, 2010 respectively. An additional special distribution of $0.250 per Unit was paid February 28, 2011 to Unitholders of record as at December 30, 2010.Beginning after January 1, 2011 (starting with the January 31, 2011 record date), Shareholders of DCPayments have received monthly payments in the form of dividends, with the initial monthly dividend set at $0.115 per Common Share. All dividends are eligible dividends for the purpose of the Income Tax Act (Canada) unless indicated otherwise. Dividends are funded from cash flows generated by the operation of the business. As of January 1, 2011, all of the income generated at the level of the various subsidiaries within the DirectCash Group income is taxable by applicable government authorities with the remaining after-tax funds either being retained by the subsidiary or distributed/dividended up to DCPayments (where it can be made available for payment of dividends by DCPayments). Continued future distribution of dividends (and the amount of any dividends) is subject to DCPayment's board of directors approval. DCPayments' board of directors is not obligated to distribute all net available cash as dividends to shareholders.Productive capital maintenance expendituresDCPayments differentiates capital expenditures between growth and productive capital maintenance ("Maintenance Capital"). There is no such distinction under IFRS. However, DCPayments believes it is important to differentiate between them as maintenance capital expenditures represent a discretionary adjustment to distributable cash flow while growth capital does not.Maintenance capital expenditures are defined as expenditures required to service and maintain DirectCash's existing productive capacity, while growth capital is expended to increase DirectCash's productive capacity by adding additional sources of revenue not currently in existence. Current measures of productive capacity that DCPayments utilizes include ATMs and debit terminals under contract (see "Operational Highlights"), software and hardware upgrades to existing infrastructure, ATM and debit terminal equipment upgrades necessary to meet changing regulatory requirements, contract extension incentives, and fleet vehicle purchases and upgrades, are some examples of maintenance capital expenditures.Examples of growth capital expenditures include the acquisition of a competitor's assets, the cost of an ATM in a new location, or technology costs related to new sources of revenue.Readers are cautioned that productive capital maintenance expenditure is not a defined performance measure under IFRS. DCPayments computation of productive maintenance capital expenditure may differ from similar computations as reported by other issuers and, accordingly, may not be comparable to maintenance capital expenditures as reported by such issuers.Non-cash working capitalNon-cash working capital is not a defined IFRS measure. DCPayments calculates non- cash working capital as current assets less current liabilities, but excluding cash and credit facilities. A summary of this calculation is provided in the MD&A.Forward-looking StatementsThis Press Release contains certain forward-looking statements relating to future events. Forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond DirectCash Group's ability to control, including the impact to DirectCash Group's business, general economic conditions, consumer spending, borrowing trends and regulatory changes to name a few. Certain statements that contain words such as "could", "believe", "expects", "expected", "will", "intends", "projects", "anticipates", "estimates", "continues" or similar words relating to matters that are not historical facts constitute "forward-looking information" within the meaning of applicable Canadian securities legislation. In particular, forward-looking information and statements contained in this Press Release include statements related to DirectCash's projected growth in Canada and Mexico in the ATM business, projected growth in the prepaid and debit terminal business, accretive acquisitions on a go forward basis, expansion of DirectCash's merchant base through new and innovative products, entry into new geographic markets, ability to continue to acquire long-term recurring services contracts and expected increase in capital expenditures due to regulatory mandated security upgrade changes are all statements that have been stated or referred to throughout this Press Release. Readers are cautioned that actual results may vary from the forward-looking information provided.Additional information about DCPayments is available on SEDAR (www.sedar.com) or DCPayments website at www.directcash.net.FOR FURTHER INFORMATION PLEASE CONTACT: Claudette M. DickDirectCash Payments Inc.Chief Financial Officer(403) 387-2188(403) 451-3088 (FAX)claudette@directcash.netORAmanda J. GallacherDirectCash Payments Inc.Investor Relations(403) 387-2158(403) 451-3058 (FAX)investorrelations@directcash.netwww.directcash.net